Unlike the pound, the euro traded sideways yesterday, although the fundamental backdrop affected both currencies in the same way. The macroeconomic calendar was empty. Meanwhile, news about the confrontation with Russia had an equal impact on both the euro and the pound, so they should have behaved alike. Nevertheless, one significant difference determined the direction of the euro.
Both currencies started the new trading week with a fall, with the euro rising sharply afterward. Its increase was triggered by speculation in the US media that the ECB would immediately begin monetary policy tightening and raise the benchmark rate at least four times throughout the year.
That turned out to be disinformation that got lost in the general news flow by the North American trading session's open. Sometimes, fake news is spread to manipulate the market. In the end, the euro returned to the starting point of the day.
The euro and the pound have shown similar movements early today. They are now under pressure as Russia, and the EU are at odds over gas payments in rubles. Russia announced it would sell the commodity to Europe for rubles. The decision will come into force on April 1.
The EU rejected the demand. The Kremlin responded, saying it would stop gas supplies if European countries refused to pay for natural gas in rubles. In this light, the euro is likely to remain under pressure until a solution is found.
Having failed to break through the lower limit of the 1.0960/1.1050 sideways range, EUR/USD returned to the starting point. Such price behavior reflects traders’ uncertainty while the market is still at an accumulation stage.
The RSI indicator is at line 50 on the H4 chart, confirming the flat market. According to the H4 chart, the Alligator indicator moves in the sideways range without giving any buy/sell signal. On the daily chart, the Alligator shows a downtrend in the medium term, and its MAs are not crossed.
On the daily chart, there is a downtrend with a corrective move from the support level of 1.0800 and a flat in its structure.
Outlook
The pair still trades in the 1.0960/1.1050 sideways range. Since the price is unlikely to leave the range any time soon, the strategy of trading on a breakout of one or the other limit of the range is still relevant. The flat in the market could cause an increase in speculation.
In terms of complex indicator analysis, there is a signal to buy the instrument in the short as the pair has rebounded from the lower limit of the range. Indicators make mixed signals for intraday trading and signal to sell the pair in the long term due to the mid-term downtrend.
